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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 14685 / October 11, 1995
SECURITIES AND EXCHANGE COMMISSION V. JAMES P. MCLAUGHLIN,
(United States District Court for the Northern District of
Illinois, Civil Action No. 95C 5241)
The Securities and Exchange Commission announced that on
September 13, 1995, the Commission filed a Complaint for
Permanent Injunction in the United States District Court for the
Northern District of Illinois against Defendant James P.
McLaughlin (McLaughlin). In its Complaint the Commission alleges
that from February 1991 through May 1993, McLaughlin, through
three corporations he controlled, Global Venture Capital (GVC),
GVC Asset Management, Inc. (GVCAM) and TMB Futures International,
Inc. (TMB), fraudulently offered and sold common stock and
convertible debentures through seven private placement offerings
to at least 81 investors in 17 states raising at least $1.1
million in which he misrepresented the intended use of investor
proceeds.
Specifically, the Commission alleges that McLaughlin raised money
from investors by claiming that both GVC and GVCAM were venture
capital firms that would use offering proceeds to fund the
development of start-up and growth businesses. McLaughlin also
identified Capital Securities Group, Inc. (CSG) as GVC's wholly
owned broker/dealer subsidiary and claimed that GVC was the
Chicago office of Tamaron Investments, Inc. (Tamaron).
McLaughlin raised money through TMB by claiming that TMB would
operate as an introducing broker to solicit or accept commodity
futures orders. In reality, less than 10% of the funds generated
through GVC and none of the funds raised through GVCAM and TMB
were used for the purposes claimed by McLaughlin. The remainder
of investor funds were misappropriated by McLaughlin for business
and personal expenses. Furthermore, CSG never existed and
Tamaron denied any affiliation with GVC. As a result, the total
losses sustained by McLaughlin's investors exceeds $1 million.
As a consequence of McLaughlin's alleged fraudulent actions, the
Commission maintains that McLaughlin, directly and indirectly,
has engaged in acts, practices and courses of business which
constitute violations of Sections 17(a)(1), 17(a)(2) and 17(a)(3)
of the Securities Act of 1933, Section 10(b) of the Securities
Exchange Act of 1934 and Rule 10b-5 promulgated thereunder. The
Commission also seeks disgorgement of all of McLaughlin's ill-
gotten gains acquired through his scheme, the imposition of civil
penalties and other ancillary relief. Finally, the Commission
seeks to prohibit McLaughlin from acting as an officer or
director of any issuer with securities registered under Section
12 of the Exchange Act.